ICD arm paid $2.2bln for AWAS leasing business, accounts show

Dubai government's main investment arm also spent $275m on contractor Alec

Image for illustrative purposes. Dubai skyline.

Image for illustrative purposes. Dubai skyline.

Dubai Tourism

Investment Corporation of Dubai paid over 9 billion UAE dirhams ($2.5 billion) for two companies acquired last year, with almost 8.2 billion dirhams ($2.2bn) going on subsidiary Dubai Aerospace Enterprise's buy-out of Dublin-based aircraft leasing business AWAS, according to the company's newly-published 2017 accounts.

Investment Corporation of Dubai, which is the principal investment arm of the Dubai government carrying stakes in a range of companies including Emirates airline, Emirates NBD bank and Emirates National Oil Company, also paid just over 1 billion dirhams for Dubai-based main contractor ALEC Engineering & Construction, notes to the company's accounts state. The company bought a 90 percent stake in ALEC via its Binaa Dubai subsidiary from the Abu Dhabi-based Al Jaber Group, with ALEC's management retaining the remaining 10 percent.

ICD also upped its stake in the Dubai Aerospace Enterprise leasing business to 95.74 percent, from 80.53 percent previously.

On the disposals side, the business gained from an inflow of 1.04 billion dirhams following the spin-out of Emaar Development by Emaar Properties (in which ICD owns a 27.5 percent stake) in November last year. Emaar Properties raised over 4.8 billion dirhams from a 20 percent stake sale in Emaar Development.

ICD’s net profit attributable to its equity holder increased by 12.4 percent to 20.2 billion dirhams on revenue of 200.9 billion dirhams, which grew by 13.8 percent on the back of improved contributions from its oil & gas and transportation services arms, according to a press release issued by ICD on Tuesday.

Total assets also increased by 9.7 percent to 844.3 billion dirhams and liabilities by 10 percent to 616.8 billion dirhams due to the aircraft leasing company acquisition and increases, both in lending and customer deposits in the banking businesses.

In the press release, Mohammed Ibrahim Al Shaibani, ICD's executive Director and CEO said: “We are pleased today to be posting record numbers for both our revenues and size of assets. In 2017 the portfolio of ICD delivered a strong financial and operational performance despite challenging market conditions impacted by an increase in interest rates and currency volatility. These results reflect the continuous focus of ICD on growing its key businesses and achieving meaningful operational efficiencies that will support long-term growth and contribute to the prosperity of Dubai.”

ICD holds stakes in a string of other entities including: FlyDubai and travel services firm dnata in the transport sector; in Noor Bank, Dubai Islamic Bank and Commercial Bank of Dubai in the banking sector; Dubai World Trade Centre; Dubai Duty Free; and Borse Dubai, which is the majority shareholder of both the Dubai Financial Market and Nasdaq Dubai exchanges.

A segmented analysis in notes to ICD's accounts found that banking and finance generated 10.6 billion dirhams (42 percent) of ICD's pre-tax profit from continuing operations of 25.2 billion dirhams last year, while transport and related services generated 6.1 billion dirhams (24 percent), the oil & gas businesses generated 3.3 billion dirhams and the remaining 5.1 billion was generated from its other businesses.

(Reporting by Michael Fahy; Editing by Anoop Menon)

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